Business: The Fastest Growing Market in North America
Between January and July of 2009, the popular social networking site, Facebook, saw a 513.7 percent increase in its members aged 55 and over. During the same period it reported having 16.5 percent fewer high school users and 21.7 percent fewer college student as its members. This is a shift that can’t be ignored by any serious marketer, entrepreneur or company.
With the recession having left a bleak economic landscape in its wake, marketers across the continent are hard pressed to find new ‘pockets of customers’ with any appetite for buying.
Spending habits and consumer choices are changing rapidly, as are market demographics. This leaves the marketers, entrepreneurs and business owners in a serious predicament. They cannot logically continue to target the younger demographic, a group that has taken the biggest hit in the current financial crisis, while ignoring the older market segment. Given its ever-increasing market size, buying power, and significantly higher propensity to buy, it’s no wonder that recent trends show a gradual but marked shift in interest towards marketing goods and services to this segment.
According to a Health Canada study called Canada’s Aging Population, “As the “baby boomers” (born between 1946 and 1965) age, the seniors population is expected to reach 6.7 million in 2021 and 9.2 million in 2041(nearly one in four Canadians). In fact, the growth of the seniors population will account for close to half of the growth of the overall Canadian population in the next four decades.”
The consequences of this trend can hardly be ignored. The slow but steady ‘greying of North America’ has major implications on spending patterns and market dynamics. We can expect more and more products to be focussed entirely on the elderly demographic, catering to their needs and wants. As it stands now, this group represents a significant but largely untapped consumer demographic.
How we got here
The end of World War II marked the start of a baby boom across four countries: the United States, Canada, Australia, and New Zealand. In 1951 noted columnist Sylvia Porter, wrote in the New York Post, “Take the 3,548,000 babies born in 1950. Bundle them into a batch, bounce them all over the bountiful land that is America. What do you get? Boom. The biggest, boomiest boomy boom ever known in history.”
Over 80 million North Americans were born during this demographic boom. Across the past six decades they have fuelled a housing boom, consumption boom and a boom in the labour force. They have constantly reshaped the market with their insatiable demand for cars, houses, food processors, cassette players, refrigerators and other consumer goods.
Now, as they stand at the brink of retirement they are all set to redefine the profile of a marketers ‘ideal customer’.
Age Wave founder Ken Dychtwald says, “Although marketers tend to pursue the youth market, that’s not where the money is.” Older consumers, free from the worries of youth, responsibilities of bringing up a family, sending kids to college, often possess a steady retirement income. Collectively [in the U.S.] they spend $52 billion every year toward goods and services for their grandkids alone. That is a significant amount of business, and a big opportunity for any entrepreneur, business owner or marketer.
Whether you are a student, a businessperson or a service worker, a little foresight and planning could put you in a position to profit from this great opportunity. From golfing trips and cruises to healthcare services, investment management to interior decoration there are a wide variety of niches where a focused entrepreneur could position products and services to make the best of this great opportunity. The consumers in this huge segment know what they want, have the resources to get it and are open to new products and services customized for them.
Where’s the catch?
Selling to this market demographic requires a completely different approach than selling toasters, iPods, burgers or apartments to 20 and 30-somethings. Older consumers know the value of their money, their purchase decision-making processes are significantly different, as are their needs and customer service expectations.
For example, seniors will probably want food products with enhanced nutrition profiles, which are convenient and packaged into smaller servings. Economically, smaller units are less expensive, and environmentally, they reduce waste.
The “Report on Maturing Adults in America” by Wharf Research, San Francisco notes that seniors are best targeted by age and gender. Education and income have a significantly lesser impact when marketing to this segment. Their palates, the study says, are similar to those of the younger generation. They enjoy ethnic foods, have a high level of awareness and are open to global cuisines, from quesadillas and sushi to pestos, empanadas and curries.
The Global New Products Database (GNPD), Chicago has identified only 10 products introduced in the last two years that target seniors (aged 55+) – an unimpressive figure for such a significant, fast-growing consumer segment.
Attracting these consumers needs a targeted effort emphasizing on taste, convenience and nutrition. Nutritional contents must include lower fat and sodium, higher fiber and calcium. To communicate these advantages, packaging labels must be easy to read, find and comprehend.
Another niche where this segment has been comparatively more organized is travel. Many ‘Grey Boomers’ own their own homes and don’t have time constraints or family responsibilities and thus love to travel. Similarly they give consistently to charities, and have a wide range of hobbies and interests, which again present a whole range of business opportunities.
Boomers don’t just want to look good, they want to feel great, too. From health-clubs offering low-impact equipment and fitness classes to errand services that tackle driving, cooking and maintenance, a variety of specialized ventures stand to gain. In many cases all you need to get started is a computer, a phone and a reliable vehicle.
There are hundreds of ways entrepreneurs can tap this massive market – from small shops started on a shoestring to larger operations that require serious capital. All it requires is a vision, an understanding of the segment and its needs, and a fierce determination to succeed.